Blank (at left): "Because of the way funding has changed, we are much better at funding the university from out-of-state dollars."

State lawmakers and University of Wisconsin System administrators came together Thursday at an event meant to repair strained relationships following last April's discovery of the system's $650 million in reserves.

The administrators and lawmakers speaking at the event -- optimistically named "Finding Common Ground" -- largely agreed that more communication and financial transparency is needed between the UW System and the Capitol.

"We need the fiscal facts laid out in ways that we know what the revenues and expenses are," said Sen. Alberta Darling (R-River Hills). "I don't think in many cases that the right hand knew what the left was doing."

But politicians and university officials are at odds over the larger issue of how to fund a higher education system without sacrificing the quality of education.

Darling said the current system was "broken" and that "better financial management" would help the system maintain the quality and affordability of higher education in Wisconsin.

Darling's Republican colleague, Rep. Pat Strachota (R-West Bend), allowed that the system's "bread and butter" comes from federal dollars and business partnerships within the state, but added that tuition dollars need to be spent more wisely.

Blank noted that just 17% of the university's funding comes from the state, down from 43% 40 years ago.

"My predecessors have actually been incredibly entrepreneurial ... by going to other sources of finance," Blank said. "Because of the way funding has changed, we are much better at funding the university from out-of-state dollars."

Most problematic, she said, are regulations and stipulations that interfere with the flexibility the university needs to attract out-of-state research and tuition dollars, such as the cap on out-of-state students.

Relying on a frequent comparison, she suggested that Madison should follow the University of Michigan's lead by raising out-of-state tuition to "subsidize" in-state tuition. Currently, Madison costs $14,000 less for out-of-state students than Michigan.

But some costs can't be avoided -- most notably, the rising cost of faculty salaries.

"The main cost at our universities is what gives us our reputation ... our teachers," Blank said. "There's a market out there. If we don't pay salaries, someone else will."